In most cases, current liabilities are payable within ________ year(s), and long-term liabilities are payable more than ________ year(s) from the balance sheet date.
A) one two
B) one one
C) two two
D) one ten
Answer: B
Which of the following is not a current liability?
A) Accounts payable.
B) A note payable due in 2 years.
C) Current portion of long-term debt.
D) Sales tax payable.
Answer: B
Given a choice, most companies would prefer to report a liability as long-term rather than current because:
A) It may cause the firm to appear less risky to investors and creditors.
B) It may reduce interest rates on borrowing.
C) It may cause the company to appear more stable, commanding a higher stock price for new stock listings.
D) All of the other answer choices are correct.
Answer: D
